More and More Student Debt

The college debt keeps climbing. According to an article by Josh Mitchell in the Wall Street Journal:

U.S. student-loan debt rose by $42 billion, or 4.6%, to $956 billion in the third quarter, the Federal Reserve Bank of New York said Tuesday. Overall household borrowing fell during that period.

Payments on 11% of student-loan balances were 90 or more days behind at the end of September, up from 8.9% at the end of June, a rate that now exceeds that for credit cards. Delinquency rates for all other consumer-debt categories fell or were flat.

Education debt, according to the article, has increased 56 percent since 2007, before the Great Recession began. Other household debt declined by 18 percent during the same period.

Unlike other forms of debt, federally backed student loans don’t require proof of income in order for students to qualify (and never have) and aren’t generally dischargeable in bankruptcy (a policy that dates from 1998 amendments to the Higher Education Act).